Is AI reason behind TCS layoff decision? Tata firm imparts AI training to... employees

Why did Tata Consultancy Ltd (TCS) announce it would lay off 2% of its workforce, or more than 12,000 of its employees? Is it due to the Artificial Intelligence (AI)? However, TCS CEO K Krithivasan denied that the layoff decision was taken because the AI might replace these workers. Instead, he said that the cuts are due to a skill mismatch and the company’s inability to redeploy some of its employees in its evolving business model. He told 'Money Control,' "This is not because of AI giving some 20 per cent productivity gains. This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone."

TCS imparts AI training

Explaining the reason, Krithivasan said, "Some people, especially at senior levels, find it difficult to transition to tech-heavy roles." However, it remains a fact that the TCS has invested heavily in AI upskilling and training. It has trained more than 5.5 lakh employees in basic AI and over 1 lakh in advanced skills. It is also a fact, and the company has admitted that reskilling has not always led to re-employment, especially for senior professionals.

TCS undergoing structural changes

The TCS is also undergoing a structural change; it is moving away from the traditional "waterfall" project management method to a more agile, product-centric model. With this change, the need for conventional project and program managers has decreased. Krithivasan emphasised that it was a difficult and painful decision and assured that TCS would handle the layoffs "in a very, very compassionate way." He said that the company will offer severance packages, extended health insurance, mental health counselling, and outplacement support to those affected.